Gamestop (GME) Stock Price and Forecast: GME down but not out, eyes weekly gain


  • GME ended Wednesday in the red at $185.81, down roughly 3%.
  • GameStop has signalled something bullish by being green in a sea of red on Monday.
  • GME and meme stocks roar on Tuesday as risk is back on.

Update July 22: Gamestop GME snapped a two-day uptrend and fell 2.81% on Wednesday, corrective from weekly highs of $195.41. GME stock failed to take advantage of the upbeat risk tone, as it settled the day at $185.81. Acceptance above the $200 mark is critical to sustaining the recent recovery. However, with new meme stocks in town, investors are shifting their focus from GME and AMC. Despite the pullback, the shares are on track to book the first weekly gain in seven weeks.

 

Monday was a pretty good day for the original meme stock – GameStop. What was a pretty bad day for markets saw GME shares buck the trend with a gain of 2.6% to close up at $173.49. Any stock that closes up when the S&P was down 1.6% deserves a closer look. When that stock is the eponymous GameStop, then we need to see what is going on. On Monday FXStreet proposed that it might be time to consider a long position in GameStop, but we did not think it was that imminent. Now though some factors may merit taking a long position but using risk control measures as GME is not to be trifled with.

GameStop key statistics

Market Cap $12.1 billion
Enterprise Value $11.4 billion
Price/Earnings (P/E) -123

Price/Book

24
Price/Sales 2
Gross Margin 24%
Net Margin -2%
EBITDA -$112 billion
Average Wall Street rating and price target Sell $88.33

GameStop (GME) stock forecast

Monday's move can be seen as a catalyst to consider in more detail the long argument made yesterday here at FXStreet. The preference still remains to buy a dip near the $136 support, which is the May 11 low. But we may be seeing some bounce ahead of that. 

Three reasons why the risk reward is now favouring further gains on Tuesday:

1. Monday's outperformance, up in a weak day overall for equity markets.

2. Both the Relative Strength Index (RSI) and the Commodity Channel Index (CCI) have bounced from lows in line with price action, a confirmation of sorts.

3. The volume profile in this admittedly wide zone from $140 to $180 is high, meaning the price is more likely to find support here.

Caution is as ever needed when dealing with meme stocks and in particular the king of them all, GME. To confirm, the very short-term turnaround from Monday's high at $179 needs to be broken, and this would then see GME trade above the 9-day moving average. The Moving Average Convergence Divergence (MACD) is still crossed into bearish territory, meaning caution is needed. Look for this to crossover for further bullish momentum.

Previous updates

Update market close July 21: Gamestop GME was unable to extend gains despite a better market mood pushing stocks higher, and closed the day down 2.99% at $185.81. Demand for GameStop cooled as investors looked out for more solid investments, although it holds on to the positive ground on a weekly basis. A break through the psychological 200.00 mark is critical at this point.

 

Previous update: The bullishness is continuing in the first half-hour of trade on Wednesday but only just about. GME is just in the green with a modest start to the session. The MACD mentioned below still has yet to crossover and GME is stalling at the 21-day moving average. Volume lightens up above $200 meaning a break could accelerate. 

Previous update: FXStreet had turned cautiously bullish on GME on Monday based on the outperformance, and Tuesday rewarded us with a 10% gain. In the process, GME stock has traded back to the short-term moving averages. Now it has moved out of the consolidation zone and back into an area of light volume, so further gains could be easier. The first target is the 9 and 21-day moving averages. Look for the Moving Average Convergence Divergence (MACD) indicator to cross into bullishness for further momentum to the move.

 

 


Like this article? Help us with some feedback by answering this survey:

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD: Bulls knock the door ahead of Fed

EUR/USD struggles to extend two-day uptrend, sidelined of late. The major currency pair rose for the second consecutive day on Tuesday while confirming the falling wedge bullish formation on the daily chart.

EUR/USD News

GBP/USD rebounds toward 1.3900 as USD weakens

GBP/USD extends the previous two day’s gains in Wednesday’s Asian session. The pair trades in a very narrow trade band and awaits for confirmation. US dollar trades below 93.00 ahead of the FOMC meeting. The sterling gains on the sharp decline in coronavirus infections.

GBP/USD News

EUR/USD: Bulls knock the door ahead of Fed

EUR/USD struggles to extend two-day uptrend, sidelined of late. The major currency pair rose for the second consecutive day on Tuesday while confirming the falling wedge bullish formation on the daily chart.

EUR/USD News

Three reasons why Cardano could rally 60%

Cardano price triggers a large symmetrical triangle pattern with yesterday’s close above the upper trend line. ADA/BTC is nearing a critical support level with the intra-day Relative Strength Indexes (RSI) flashing a bullish momentum divergence.

Read more

Fed Interest Rate Decision Preview: The horns of a inflation dilemma

No change in rate policy or bond purchases expected. US economy appears to be slowing under labor, supply chain shortages. Treasury curve has flattened, inflation has jumped since the June 16 FOMC. Dollar has gained against most majors since mid-June.

Read more

Forex MAJORS

Cryptocurrencies

Signatures